Timken 221 transfer case: output shaft play?

[daverepair]

I have a '60 K10, and while doing some maintenance(removing front driveshaft to replace a u-joint), discovered in & out play in the front output shaft, in the transfer case. I'm assuming this is not right(and not good). Can anyone confirm, there should be no play(movement) of the shaft? Am I looking at a rebuild, to correct this?
I have the shop manual, it does not show any shims on this shaft to adjust bearing preload. Anyone have experience with this problem? Thanks, Dave